Op-Ed: Medicaid managed care reduces fraud

The U.S. Supreme Court ruled that states cannot be coerced to expand Medicaid, the federal and state government-funded health care program for the poor, pregnant women and children. Yet the Affordable Care Act prohibits states from making changes to control costs, leaving state leaders with three options: cut provider rates paid to doctors and hospitals, take further steps to control waste, fraud and abuse, or expand managed care.

Provider rate cuts, especially those aimed at primary care physicians, limit the number of doctors who accept Medicaid patients. Taking rate cuts off the table leaves policy makers with two tools: fighting fraud and expanding managed care. The two are directly linked.

In 2011, Texas legislators expanded Medicaid managed care statewide, a good move for taxpayers and those who depend on the program.

Healthcare fraud robs citizens who foot the bill for Medicaid, Medicare and private insurance coverage. A review of recent news stories includes a South Texas physician indicted for health care fraud and accused of illegally funneling more than $1.8 million to Iran.

Medicaid dental fraud is so pervasive that the Texas attorney general and inspector general launched a joint task force targeting fraud in Medicaid dental reimbursements.

The statewide rollout of Medicaid managed care results from the success of combating fraud and delivering cost savings. Unlike other Medicaid delivery models, managed care plans assume all the cost “risk” for the beneficiaries they cover. Because the state contracts with managed care providers on a flat monthly fee-per-client basis, there is no scope for the state to be fraudulently billed for health services.

Through managed care, the state can achieve Medicaid budget certainty and save tax dollars. The Health and Human Services Commission estimated more than $1.1 billion in savings in the 2012-2013 budget cycle attributable to managed care. These plans also provide a level of coordinated care that was severely lacking in traditional Medicaid. This is critical in Texas given rising costs associated with “unmanaged” and uncoordinated Medicaid offerings, which were unsustainable. Even now, Medicaid consumes a growing share of the state budget, threatening funding for schools and law enforcement .

As part of the expansion of Medicaid managed care, participating health plans will bring all pharmacy dispensing fees in line with what is being paid in the private sector. Pharmacies will receive lower taxpayer-funded fees on any prescription paid for with Medicaid dollars, in line with what is being paid by private sector health insurers. Despite this change, more than 35 pharmacies have been added to the program in recent months.